To identify coding variation that increases susceptibility to T2D via its effect on a pre-diabetic trait, we obtained exome sequence data on 177 Pima Indians. 148,616 variants (11.1% novel) were detected that met our quality control criteria. Of these variants, 15,799 and 15,642 were non-synonymous and synonymous SNPs, respectively. Selected variants (N=360) were genotyped in 555 non-diabetic Pima Indians characterized as inpatients in our Clinical Research Center for % body fat (PFAT), central obesity (waist/thigh), glucose disposal rates (M) during a hyperinsulinemic-euglycemic clamp, acute insulin response (AIR) to intravenous glucose, and 2-hour plasma glucose concentrations (2-hr glucose) during an OGTT. Variants were further assessed for association with BMI and T2D in up to 7,667 subjects who had participated in a longitudinal study of T2D in the Gila River Indian Community. Two SNPs (in the genes ASXL3 and CYB5A) were significantly associated with a pre-diabetic trait after correction for multiple testing (360 SNPs analyzed for 5 traits required a p<2.710-5). The SNP in ASXL3 (rs2282632) was associated with insulin sensitivity (M; p= 2.010-5, adjusted for age, sex, PFAT and nuclear family membership) but was not associated with T2D. In contrast, the SNP in CYB5A (rs7238987) was associated with PFAT (p=6.710-6) in 555 non-diabetic subjects, BMI measured at a non-diabetic exam in 5880 subjects (p=6.210-7) and T2D in 7667 subjects (OR=1.14 1.03-1.14; p=9.210-3). Variants in 6 other genes (RNF10, BBS12, ACACB, ZNF530 and HNF4A) had comparable associations with T2D (P<9.0x10-3), but their associations with pre-diabetic traits were weaker (not significant after adjustment for multiple testing). CYB5A provided the strongest evidence for a pre-diabetic loci. It encodes a membrane bound microsomal hemoprotein which acts as an electron carrier for the stearoylCoA-desaturase (SCD) complex facilitating the conversion of saturated fatty acid to mono unsaturated fatty acid. Prior studies have reported that SCD activity is associated with obesity. We conclude that exome sequencing is a viable technique for identifying new loci that increase risk for T2D via an influence on a pre-diabetic trait. We have also obtained whole genome sequence data on 335 Pima Indians (51% male, age: 25.15.8 years, BMI: 33.57.3 kg/m2). Sequencing was performed by Illumina (N=301) and Complete Genomics, Inc (N=34). 13 million variants were found, including 11 million SNPs, 1.6 million Indels and 255,802 substitutions. Among all SNPs, 2.7 million were novel. SNPs that tag all common variation (minor allele frequency >5%) are currently being genotyped on custom arrays (Affymetrix) in 3700 Pima Indians for association analyses.